Tuesday, 6 January 2009

AIG still owes the Fed $40 billion.

The Federal reserve has just begun publishing the credit extended to the troubled US insurer - AIG. The company wobbled when Lehman Brothers were declared bankrupt.

The data offers both bad and good news. The amount of credit peaked at $80 billion. However, AIG's dependence on Fed largesse also seems to have stabilised at an unacceptably high level of $40 billion.

I just wonder if the money went somewhere else, rather than the Fed successfully putting AIG into run-off mode. Seeing as Yves Smith at Naked Capitalism is really really keen on fisking the AIG bailout, the fact she hasn't done anything on this makes me reluctant to believe the Fed actually did something right in the past few weeks.